ADKINGS CASE STUDIES

Hyper-Scaling eCommerce DTC Brand from $0.5M to $26M in Just 1-Year and How Facebook Ads x Omnichannel Marketing Strategy Works in Practice

In the Best Case Studies, the Results Speak for
Themselves. Here Is a Sneak Peek:
Within a year we have achieved the following:

âś” Hyper-Scaling eCommerce DTC Brand from $0.5M to $26M;

âś” Increasing the Average Order Value (AOV) by 23.61%

âś” Changed Facebook Sales Attribution to be more accurate

✔  10x order increase from the lowest to the highest point

âś” 3,734% increase in Online Store Sessions
Initial Goal With the Client
âžś How to manage brands with variable demand throughout a year
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âžś How to increase the average order value and thereby improve earnings
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âžśWhy lulls in demand might be perfect for reconsidering your marketing
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âžś How Facebook is misreporting numbers and making you spend money on unprofitable campaigns
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âžś How to profitably scale during different times of the year
Introduction
Here at the Adkings Agency, we’re in the habit of pushing businesses to the next level.

Sometimes we get good eCommerce businesses that have recently plateaued. This usually means that the business owners have already pushed revenues as high as they could, but without having more in-depth knowledge of online marketing, they’ve exhausted their options.

This is where we come in - we’re brought in to look into their marketing strategy and troubleshoot it, to allow it to scale once more.

Last year, we had the opportunity to work with an eCommerce company with all the attributes necessary to become a fantastic business. It specializes in selling gifts for loved ones, with print on demand designs, and has a solid social media following.

However, due to the nature of the products it stocks, demand is highly inconsistent and primarily driven by gifting occasions (Valentine’s, Mother’s day, Father’s day, Christmas, etc).

As such, it is a business where you have to quickly adjust your marketing efforts, or you will face diminishing, or even negative, Return On Advertising Spend (ROAS).

In the end, despite the pandemic, and unprecedented levels of volatility, we pushed their annual revenue 52x, from $0.5M to $26M in under a year.

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This case study will show you a month-on-month view of our client’s journey, and how we pushed the business to the next league. These strategies can be applied to all eCommerce businesses.
#First Quarter (Jan-Feb-Mar)
Quarterly Revenue: $1,144,443
‍Contribution to the Annual Revenue: 4.19%
‍Average Order Value: $87.48

‍Modest success but testing new creative strategies / Facebook Ads were the main drivers for growth

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The year started much stronger than you might have expected, given the annual revenue throughout the prior 12 months. However, this is mainly due to the fact that January is around the corner from Valentine’s (February).

During this period we hadn’t yet started working with them, but their main driver to sales was Facebook. They had a solid foundation to start, and even singlehandedly outdid the prior year’s revenue in one month.

But after starting the year strong - with $564k revenue in January - sales fell by 32% in February, and by March the monthly revenue had fallen 65% from its high point in January.

‍With a drop-off so steep, even a seasoned professional would reconsider their strategy going forward.

Hence, the months following Valentine’s were a period of reassessing the situation. During this trial period, many sales designs, creatives and marketing channels would be trialled.

‍Partially, this is what would lay the groundwork for the stellar results over the course of the year.

Due to the nature of the business, the company needed to test the desirability of new products, before big gift-giving events like Mother’s and Father’s day.

As such, by the time that we began working with them, they were ready to scale. And just needed a bit of help to maximize their potential...
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#Second Quarter (Apr-May-Jun)
Quarterly Revenue: $9,238,549
Contribution to the Annual Revenue: 33.82%
Average Order Value: $101.24
AOV increase vs start of year: 15.73%

‍Horizontal and Vertical Expansion / Shifting Target Audiences

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After the 65% decline in monthly revenues, a lot of experimentation, as well as COVID volatility, this eCommerce DTC brand decided it needed some help pushing it in the right direction again.

Early in April, we partnered with the client, and upon assessing the situation, we began a rapid scaling campaign in preparation for Mother’s and Father’s day.

‍We expanded vertically and horizontally - with new creatives launching almost every day, and scaling up the top-performing ads by increasing their budgets.

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In the early stages of this hyper-scaling period, we primarily focused on custom images for our marketing events. We did so primarily because they’re cheap and quick to produce. But we saw good results from this.

Then, as we got a handle on the types of copy that worked best, we began expanding into video content.

During this time, we also began adding other marketing channels like Google Ads and emails. Under normal circumstances, we would have waited a bit more, given how we were already scaling quite aggressively on Facebook.

‍However, the high-profit margins of around 20%, incentivised us to keep going and expanding, as it was a very good period of growth.

‍Expanding later would mean leaving a lot of money on the table, as we had a firm cutoff date.

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Given the on-demand nature of the product and the fact that the orders would need to be packaged and shipped, there is a substantial delay between order and delivery.

As such, our primary campaigns always had a firm deadline. After that point, we would have to kill most of our advertising and put a banner on the site to act as a warning that customers would not receive their orders on time for the approaching gift-giving holiday.

Meanwhile, we would need to prioritize the next holiday and ramp up those advertisements, which would likely involve shifting the target audience and the creatives.

For example, for mother’s day, we would target men and position our products as a gift to their partners. Then, after mother’s day, we reversed the targeting and the advertising copy, just in time for father’s day.

‍The strategy worked exceedingly well, as month-on-month revenue grew between March to April by 12x.

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Worth mentioning as well was how our average order value (AOV) grew by 15.73% when compared to the first quarter. It was a modest increase from $87.48 to $101.24 on paper, but when we take that AOV change, it represented a gain of $1,454,242 we would’ve otherwise not have gotten.
#Third Quarter (Jul-Aug-Sep)
‍Quarterly Revenue: $6,031,580
Contribution to the Annual Revenue: 22.08%
Average Order Value: $108.13
AOV increase vs start of year: 23.61%

‍Maximizing Retention Marketing / Launching New Products / Optimizing Sales Funnel

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This was the hardest portion of the year, as there are no major gifting holidays on the horizon. As such, our revenue trended downwards.

This was an inevitable, yet predictable turn of events. So our marketing efforts trended towards remarketing to people who had expressed interest in our brand through one of our marketing platforms.

We focused a lot on squeezing as much as possible out of every customer; upsells, email marketing, increasing conversion rate by simplifying the user experience, and so on.

‍The approach paid off, as we increased the AOV by a further $6.89 from last quarter and 23.61% from the AOV at the start of the year.

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As such, our AOV optimization was directly responsible for an additional $1,426,748 this quarter!

However, we had to be careful about how we approached our existing audience. As we had been launching new creatives on an almost daily basis, so it could be rather easy to annoy our customers.

We’d reached a marketing saturation point and creative fatigue.

We decided to downscale, yet by this point, we couldn’t go back to the days where we were only putting $1k a day, as the business had expanded since then - there were new employees, new production facilities, operating costs, and so on.

This was a bit of a do or die moment, as despite having a lot of potential, the business might curb its progress without cash flow.Nevertheless, in a strange way, this created the perfect opportunity to try different ad formats and products.

The lack of gifting holidays, the excess and unused ad-spend budget from the downscaled campaigns, created a stable environment that allowed us to experiment.

This is why we began increasing the Google Ad Spend to represent a larger portion of our budget, to diversify our ad types and see whether we could find spaces with a higher ROAS.

Our focus on testing new designs helped us find simple and replicable strategies that we began to apply to all of our campaigns.
#Fourth Quarter (Oct-Nov-Dec)
Quarterly Revenue: $10,901,944
Contribution to the Annual Revenue: 39.91%
Average Order Value: $107.82
AOV increase vs start of year: 23.26%

‍Hyperscaling with advanced tracking software, Data science and making everything work together.‍
This last quarter was the most interesting portion of the year, as our work over the last few months began to pay off. After all was said and done, this quarter represented c.40% of our revenue over the whole year!

‍But you wouldn’t initially think it would be so…

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Brands typically do very well during Black Friday & Cyber Monday (BFCM). Unfortunately, due to the fact that our client’s product is perceived as a gift for someone else, it was difficult to find a hook during this period.

The typical irresistible offer was nowhere to be seen, as the idea of “cheap gifts for your loved ones” is a bit of a tough sell, given that people often tie the price of the gift they give, to the value that they assign to the person.

As such, as the cost-per-million views (CPM) went up during this period, our profit margins decreased, despite our conversion rates remaining stable.

Yet, soon after BFCM, we began to activate our omnichannel marketing plan - where we paired Facebook Ads, Google Ads, Email remarketing, etc.

In the weeks leading up to Christmas, our sales increased considerably and our profit margin jumped to 10%.

We often scaled multiple times of day, especially once we’ve learned of Facebook’s dirty little secret.

Facebook is lying to you

We changed our sales attribution principles, as we realized that Facebook has a habit of misattributing sales, and thereby giving marketers a false impression of which campaigns are performing well.

The reason we came to this conclusion was when we saw that there was a major difference between the ROAS shown on Rockerbox, a third-party tracking software, and the Facebook advertising platform.

So we had two options before us:
- Believe the numbers Facebook was giving us, and wholly ignore Rockerbox’s figures
- Trust in Rockerbox and switch all our metrics to this system, instead of the official Facebook Advertising Platform

.From a gut-instinct level, it makes sense Facebook would give you the correct information.

After all, it’s in their best interest to report accurate numbers, as you’re likelier to keep putting money into their system if you’re earning a profit, no?Yes...but that’s not the whole story.

Facebook doesn’t have the whole picture, it makes an educated guess based on the information it has.

‍This incomplete information often makes Facebook misrepresent figures, not because it’s trying to deceive you, but because it doesn’t have access to the whole picture.

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On the other hand, in case you’re not familiar with Rockerbox, it’s a tool that centralizes all of your marketing spend, store revenue, and attributes sales to marketing channels. This means it’s easier to see where you got the final sale from and accordingly boost the campaigns that are performing well.

It’s also not a tool that you can switch on and off, it takes a few weeks to get it up and running properly, as you teach it to make the right attributions and train it to make the right inferences.

When we finally compared the numbers, Facebook showed a 2.26 average campaign ROAS as opposed to Rockerbox, which showed 1.00. In other words, some campaigns that might seem to be unprofitable by the metrics of one platform might be performing well in another, and vice versa.

‍To keep the metrics consistent, we weren’t able to cherry-pick the data.

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So we decided to go with Rockerbox’s information, as it has access to more data to make detailed extrapolations.

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Long story short, this change led us to scale some campaigns we’d been ignoring and pause others we thought were our winners.

Hyper-scaling during Christmas Period


After solving our sales attribution problems, as well as optimizing our products, creative and omnichannel marketing strategy, we were ready to face December head-on.

By the beginning of December, we got to $100k daily ad spend on Facebook alone! This translated to around $200k in daily revenue.

In addition, we began to scale Google Ads. Unfortunately, this proved to be a shallower pool than Facebook Ads and the ads weren’t nearly as profitable as they were at a smaller scaler.

Despite this, we were doing very well and made half of the December revenue in the first 12 days.

‍In percentage terms, this means that slightly under two weeks in the ramp-up to December accounted for a 7.77% share of the total year.

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But, due to the shipping date cutoff, we had to downscale past this point, as otherwise, people might buy and not get it on time and we’d sacrifice short term revenues for long term brand perception.

And then, as quickly as it came, the December Christmas period was over.

Curiously though, when you compare the month-on-month revenue, November was the most profitable month of the year for our client. December came a short second, but the month prior had 7.5% higher revenue.

Partially to blame for this was the cut-off date, as we had a firm deadline of mid-December, while for November no such obstacle existed.

Yet, we ended the year with a monthly revenue that is almost 9x the entire annual revenue of the year prior. There’s nothing stopping us from doing even better next year!
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Conclusion
It’s safe to say that despite COVID creating massive volatility in the world markets, 2020 was a fantastic year for our client.

And outside of our hand in scaling the business, it’s also worth mentioning that regardless of what happens, the desire of people to connect with their loved ones in one form or another will always be there.

This is a very human desire, and even in the face of adversity it still shines through.

Overall, this client taught us that by focusing on the non-obvious you can see extraordinary returns.

For example, while other ad agencies might have solely concentrated on hyper scaling with a flashy marketing campaign, we also paid attention to increasing the quality of leads by upselling and focusing on brand resonance.

‍This increased the AOV by around 23.61% and hence we hit the $108 mark on a consistent monthly basis.

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It remains to be seen whether we will be able to push this number beyond this point, or whether it’s a natural budgetary limit for the products we have on offer, or the economics of the audiences we are targeting.

In either case, focusing on these minor optimizations improved our revenues by $5,430,346, or 19.88% of our total revenue throughout the year.

Small percentage changes can lead to extraordinary returns when you multiply them hundreds of thousands of times.

‍In 2020, this brand had 261,816 orders, which means even a dollar change in AOV would’ve likely been able to pay for the salary of several employees!

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As such, these minor changes were very important, but we only managed to properly work them out because of the lull in gift-giving holidays. This period allowed us to optimize our system by being able to test and repeat results in a stable environment.

Consequently, the third quarter, which in hindsight was the most difficult portion of the year, turned out to be the most fruitful long term.

And this can serve as a broader life lesson as well:

‍Circumstances are often what you make of them. Hard times can help you do something extraordinary if you approach the situation with the right mindset.

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